Getty Images, the giant purveyor of stock photos, is in advanced talks to acquire smaller rival Jupitermedia Corp., according to sources with knowledge of the negotiations.
It's unclear how much Getty is willing to pay for Jupitermedia, but sources close to the deal said the image company could fetch more than $11 a share [JUPM is currently at $8.02], or nearly $450 million including debt.
Getty officials have been meeting with Jupitermedia chief Alan Meckler and conducting due diligence away from the company's Darien, Conn.-based headquarters in order to avoid alarming employees, many of whom are former Getty workers, sources said.
Meckler declined to comment. Investment banks Evercore Partners and Goldman Sachs are said to be working on the deal. Getty is looking to grow in the online market where lower-resolution images dominate.
With an exclusive story, the New York Post is out today with these big news in "Getty is Eyeing 'net Rival".
The small problem however with this exclusive story by Zachery Kouwe is that Getty Images will in all likelihood not acquire the whole Jupitermedia corporation, which would also include the Jupiterweb division (including internet.com, EarthWeb.com, DevX.com, Graphics.com and other brands), but only Jupiterimages.
If Getty instead, as the New York Post suggests, acquires indeed the whole Jupitermedia corporation, Meckler will very possibly simultaneously reacquire the Jupiterweb division: Getty has no interest in tradeshows and the related brands of the Jupiterweb division, but Meckler has a long and successful history in the tradeshow business.
Secondly, it´s hard to imagine that Meckler, after selling Jupiterimages, will retire and become a lucky grinning pensioner: "I guess trade shows are in my blood".
When CFO Christopher J. Baudouin announced his resignation in October 2006 and after Alan Meckler started to focus on the expansion of the activities of the Jupiterweb division in the last months, it was widely speculated that one fine day Meckler might be willing to sell only the Jupiterimages division and to concentrate on the activities of the Jupiterweb division in the future solely: "Jupitermedia CEO Alan Meckler recently announced a major shift for his company back into the tradeshow and online content business" (WebProNews).
The image brands of Jupiterimages include, among others, AbleStock.com, BananaStock, Botanica, Brand X Pictures, Comstock, Creatas Images, FoodPix, Liquid Library, Nonstock, PictureQuest, Photos.com, PictureArts, ThinkStockFootage, ThinkStockImages and Workbook Stock.
Jonathan Klein noted during Getty´s last conference call in January 2007: "This year [2006] we spent a total of $198 million on acquisitions. Even with all these expenditures, we ended the year with $339 million in cash". Money-to-go for new acquisitions.
Getty Images generated revenues of $807.3 million in 2006. Jupitermedia reported revenues of $80.658 million for the whole year 2005 for the Jupiterimages division and revenues of $26.565 million for Q1/2006, of $26.807 million for Q2/2006 and of $26.177 million for Q3/2006 for the Jupiterimages division.
Jupitermedia will announce Q4/2006 results on March 08, 2006. The business outlook given on Nov. 08, 2006, was between $33.0 million and $34.0 million for the whole Jupitermedia corporation for Q4/2006. Given the revenues generated in the last three quarters by the Jupiterimages division, one could expect that for the whole year 2006 the Jupiterimages division would contribute in the range of $104 million - $110 million to the overall revenues of Jupitermedia.
Adding this to Getty Images´revenues of $807.3 million in 2006, the new combined giant could generate revenues of about $911 million - $920 million per year, quickly calculated and without taking into account the expected growth in the meantime (Corbis in comparison: $251 million in 2006).
Still a lot of questions remain: will Jupiterimages´stock micropayment site Stockxpert.com and maybe also Stock.xchng become a part of iStockphoto?
Either way, some Brand X photographers will probably be very happy to observe that Getty will distribute their imagery again.
My estimation: if the due diligence is already done, as the New York Post suggests, and someone from inside Getty Images is giving a very detailed tip with brief explanations to a New York Post reporter, then we´ll see an appropriate press release within the next days.
Time for Getty Images to play the acquisition and monopoly game again, in a stock photo industry widely dominated by two companies, with Getty being by far and with distance the biggest one.
But, except for Getty itself, is this a desirable status?
Related:
- News From The Recent Jupitermedia Conference Call: "The Numbers Disappointed" (Nov. 09, 2006)
- Jupitermedia/Jupiterimages QIII/2006 Results Revisited (Nov. 09, 2006)
- Jupitermedia Q3/2006 Results: Stock Down 29.6 Percent In Aftermarket Activity (Nov. 08, 2006)
- Where’s Jupiterimages Headed (Jim Pickerell, April 14, 2006) in which he explains whether or not Meckler "entertains the thought of selling his company" (access to full story requires registration).
